Igo Limited · ASX:IGO
Igo — Independence Group NL — J.P. Morgan Clean Energy Metals Corporate Day (May 2018)
29 slides from Igo's conference presentation, May 15, 2018
Slide 1: J.P. Morgan Clean Energy Metals Corporate Day
INDEPENDENCE GROUP NL For personal use only J.P. Morgan Clean Energy Metals Corporate Day Andrew Eddowes, Head of Corporate Development ASX:IGO / ADR:IIDY 15 May 2018
Slide 2: Cautionary statements & disclaimer
Cautionary statements & disclaimer For personal use only • This presentation has been prepared by Independence Group NL (“IGO”) (ABN 46 092 786 304). It should not be considered as an offer or invitation to subscribe for or purchase any securities in IGO or as an inducement to make an offer or invit
Slide 3: Presentation Focus
For personal use only Presentation Focus • Corporate overview • Strong 3Q18 • Nova • Nova and Fraser Range Exploration • Energy storage thematic • IGO opportunities 3
Slide 4: Robust balance sheet as focus shifts from construction to delivery and discovery
Robust balance sheet as For personal use only focus shifts from Share Ownership construction to delivery and Substantial Holders(1) Mark Creasy 16% Institutional Ownership(3) Australia 66% discovery FIL 9% USA 21% T Rowe Price 8% UK & Europe 10% CBA 6% ROW 3% ASX IGO Ausbil 5% Base Perth, WA Share P
Slide 5: Embedded ESG performance & reporting in the business
Embedded ESG Key Lag Safety Metrics(1,2,3) For personal use only performance & reporting in 9.0 8.0 the business 7.0 LTIFR 12 MMA 6.0 MTIFR 12 MMA 5.0 ACSI Rating of ASX200 Sustainability Reporting(5) 4.0 3.0 Leading 2.0 1.0 Detailed - Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 S
Slide 6: Strengthening Financial Results
Strengthening Financial Results EBITDA up 14%, strong free cash flow of A$57M and net debt reduced to A$73M For personal use only Units 2Q18 3Q18 YTD QoQ Revenue and Other Income A$M 207.3 182.7 537.5 (12%) Underlying EBITDA(1) A$M 64.5 73.7 207.1 14% Profit (Loss) After Tax A$M (1.5) 9.2 12.4 n.a N
Slide 7: Focus on quality and long life assets which deliver great financial outcomes
Focus on quality and long life assets which deliver For personal use only great financial outcomes IGO EBITDA Profile (A$M)(1) 600 500 400 300 200 100 - FY12 FY13 FY14 FY15 FY16 FY17 FY18e FY19e FY20e Long (A$m) Jaguar (A$m) Tropicana (A$m) Nova (A$m) 1) Macquarie Research – 8 May 2018 7
Slide 8: Tropicana Gold Mine
Tropicana Gold Mine Boston Shaker Underground Drilling (1) For personal use only • 465,000oz gold production (100%) at $1,115/oz AISC(1) • Higher free cash flow FY18-20 - Higher gold production from grade streaming • Reserve extension opportunities - Boston Shaker underground study during CY18 - Fut
Slide 9: A$50M Commitment to Discovery in FY18
A$50M Commitment to For personal use only Discovery in FY18 Fraser Range A$10M Nova A$1.5M A$21M Tropicana A$4M Jaguar A$4.5M A$9M Long Other Greenfields 9
Slide 10: Nova
For personal use only Nova 10
Slide 11: Nova
Nova • Delivers scale, low cost, long For personal use only mine life and exploration upside • Commercial production since 1 July 2017 - Five years from discovery Nova Production (tonnes) 7,000 5,961 6,000 5,000 4,500 4,454 4,000 3,000 2,477 2,472 1,832 2,011 2,000 1,329 1,000 - 4Q17 1Q18 2Q18 3Q18
Slide 12: Successful first three quarters of commercial production
Successful first three quarters of commercial For personal use only production • Achieved nameplate capacity of 1.5Mtpa • Transitioned to smaller number of larger stopes at Nova and Bollinger • Metallurgical recoveries performing in line with or better than design recoveries • Nickel grade consisten
Slide 13: Nova is a shallow, thick, flat-lying orebody
• Nova is a shallow, thick, flat-lying orebody delivering low development costs and low mining costs • Capital development to be substantially complete For personal use only by end FY18 13
Slide 14: Resource model largely de-risked with grade control drilling
For personal use only Red traces = Remaining Diamond drilling Resource model largely de-risked with grade control drilling at Nova Nova/Bollinger diamond drilling progress and Bollinger to be 20,000 18,000 completed by end-FY18 16,000 14,000 Bollinger: Metres drilled (m) 12,000 Indicated to Measured
Slide 15: Nova near mine exploration search space is wide open
Nova near mine exploration search space is wide open with focus to date on Nova/Bollinger resource envelope For personal use only 15
Slide 16: Understanding the potential extensions of the Nova intrusive
Understanding the potential For personal use only extensions of the Nova intrusive • 58km2 3D seismic survey over mining lease completed • Drilling 3D seismic targets in FY19 • Continued drilling of extension to intrusive to the NW of Nova Goal is to expand Nova! 16
Slide 17: Why explore the Fraser Range?
September 2015 Why explore the Fraser Range? • Multiple magmatic intrusions For personal use only • Ni/Cu anomalism reported by multiple explorers along belt • Disseminated and blebby sulphides Empirical evidence demonstrates belt is fertile 1) Classic Minerals ASX Releases: 29 Aug 2013, 12 Dec 2013
Slide 18: Systematic exploration over 14,300km2 of consolidated tenure
February 2018 March 2018 Systematic exploration over 14,300km2 of consolidated tenure For personal use only • Multiple EM platforms • Bedrock geochem using Aircore • Gravity survey & mapping • Follow up RC/DDH • Actively looking for commodities aligned with energy storage thematic - DeBeers Database
Slide 19: Energy Storage Thematic
For personal use only Energy Storage Thematic 19
Slide 20: Lithium Ion Batteries
Lithium Ion Batteries Batteries with nickel-based chemistries have higher energy densities For personal use only NMC NCA LFP LMO LCO (Nickel, Manganese, Cobalt) (Nickel, Cobalt, Aluminium) (Lithium, Iron, Phosphate) (Lithium, Manganese, Oxide) (Lithium, Cobalt, Oxide) • Current favourite for EV’s •
Slide 21: Cathode active materials allocation expected to be mostly NMC by 2025
Cathode active materials allocation is expected to be mostly NMC by 2025 For personal use only NMC, 26% LFP, 24% LFP, 36% NMC, 41% 2016 2025E NCA, 9% LCO, 16% LMO, 8% LCO, 21% LMO, 9% NCA, 10% 1) Source: BMO Capital Markets: The Lithium Ion Battery and the EV Market, February 2018 21
Slide 22: Cathode Metal Content
For personal use only Cathode Metal Content(1) 2.1% 2.1% Evolving EV battery 30.4% 27.4% 9.0% 13.8% 4.6% chemistry designed to • Improve battery performance • Reduce overall cost 30.2% 36.2% 71.9% 82.3% 73.1% 28.3% 25.5% • Cathode component ~18% of 11.0% 10.9% 8.4% 10.7% 11.0% 10.9% battery cost(1)
Slide 23: Changing EV battery chemistry will boost Ni demand
Changing EV battery chemistry will boost Ni For personal use only demand • 24kg nickel, 24kg cobalt & 91kg copper in a 2017 Chevy Bolt(1) For 811 NMC chemistry in a Bolt(2) • Nickel increases by 15kg • Cobalt decreases by 17kg 1) Source data: UBS Research titled Electric Car Teardown – Disruption Ah
Slide 24: Nickel to be a big winner from EV demand disruption
For personal use only Nickel Mine Supply by Product (kt)(1) Nickel to be a big winner Ni ktpa 2018E supply Ni ktpa from EV demand disruption 3,500 deficit of 3,500 3,000 167kt(2) 3,000 • Market in deficit in 2016 & 2017 2,500 2,500 2,000 2,000 • Synchronous growth in USA, 1,500 1,500 Europe and Asia
Slide 25: IGO Opportunities
For personal use only IGO Opportunities 25
Slide 26: IGO is one of few nickel sulphide producers globally
IGO is one of few nickel sulphide producers globally For personal use only Laterite Ores Sulphide Ores • 1-2% Ni, often formed in tropical & weathered environments ~60% of Ore Supply ~40% of Ore Supply • 1-20% Ni • Found in Indonesia, Philippines, New Caledonia • Both underground and open cut extrac
Slide 27: LME Nickel Versus Nickel Sulphate
LME Nickel Versus Nickel Sulphate (US$/t)(1,2) Downstream processing US$/t opportunity for IGO For personal use only 20,000 • Produce nickel and cobalt 18,000 sulphates for EV batteries NiSO4 16,000 Price Premium • Metallurgical testwork 14,000 commenced in the March 12,000 2018 Quarter • Targeting
Slide 28: Summary
Summary • Focus on quality, long life For personal use only assets aligned to EV mega trend • Strong balance sheet with outlook for strong cash flow generation potential • Potential to unlock additional value - Downstream processing to supply nickel sulphate to the EV battery market - Focusing on th
Slide 29: For personal use only
a el a “FOLLOW US ~ UAS WE GO FROM STRENGTH TO STRENGTH igo.com.au
Independence Group NL — J.P. Morgan Clean Energy Metals Corporate Day (May 2018) on 6ix